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TSMC: Cryptocurrency Uncertainty Grows

Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the leading semiconductor manufacturing foundry based in Taiwan, warned that the uncertainty of cryptocurrency is growing. This world’s largest semiconductor maker’s voice and movement particularly compel miners’ attention for its dominance in ASIC mining chip production.

TSMC said that its second quarter revenue may fail to live up to expectations, which was estimated to reduce by 6.6%-7.8% compared to Q1 of $8.46 billion revenue, for the reason of the slowdown in demand for smartphones and cryptocurrency uncertainty grows together with the influence of exchange rate, according to its shareholder conference call on April 19.

While TSMC also pointed out that cryptocurrency-related business revenue of Q2 would outperform that of Q1 in spite of the cautious statement above. It indicates that miners are still optimistic about the future of crypto market and expect cryptocurrency price would go up despite the short-term slowdowns.

“We estimate the break-even point for big mining pools should be US$8,600, even if we assume a very low electricity cost (US$0.03 kW/h),” according to Morgan Stanley Equity Analyst Charlie Chan and his team. If the coin can’t recover $8,600, many Bitcoin miners will likely find it unprofitable to keep creating the cryptocurrency. If these miners rush to sell bitcoin off, it would be a further bear for the market.

In addition, the difficulty of mining keeps increasing and profits lowered along with the explosive hashrate growth as miners flooding in. The final 4 million bitcoins to be mined ushers in the big game of mining chips, to this extent, from which TSMC could benefit for a long term.

It was recently reported that TSMC plans to invest NT$400 billion ($13.5 billion) expanding its Hsinchu production facility as it seeks to regain momentum amid a slowdown in the global smartphone market. With the news, TSMC appears to be hedging its bets and prepared for the uncertainty cryptocurrency might bring about.